East Africa: Mobile As Africa's Debit Card - Mobile Money Integration Services Is the Next Wave of Mobile Money Growth

London — In the countries where mobile money has been particularly successful like Kenya, Uganda and Tanzania, the next unfolding wave of growth is payments integration. It sounds boring but it's tying in merchants and banks to mobile money to allow more payments to be made more effectively. Russell Southwood talked to Arnold Sentuwa Luwugge and Gerald Begumisa of Yo Uganda about what it might mean.

Yo's Arnold Sentuwa Luwugga describes the company as "developing technology and mobile solutions for businesses and NGOs". It has developed its own custom software and has customers both in Uganda and in other African countries. It is currently working on rolling its services out in Burundi.

It facilitates payment between banks and the mobile money payment operators. It works for several banks including Opportunity Bank and EFC Bank to allow money to come out of and go into bank accounts. It also does bulk payments for both banks and NGOs.

The latter are increasingly delivering social payments and things like per diems to the phones of beneficiaries. Indeed USAID has initiative to migrate cash payments of this kind to digital:"Three NGOs have used it so far and we expect it to scale up this year. If you have 50 people at a workshop, you no longer need to carry cash to pay all the attendees. We make arrangements with the mobile operators to have agents nearby so the cash can be accessed easily." The National Bureau of Standards can receive payments for inspection and certification through mobile payment.

It also does the more standard bill paying for things like utilities bills. The user can click a simple pay button to accept the amount displayed and a message is sent for confirmation back to the mobile and if accepted, payment is made to the merchant. Customers of ISPs like Smile can recharge their internet accounts in the same way and there is a direct link between Yo and Smile allowing the latter to see payments made in real-time.

Its online payment platform for transactions of this kind has 500 merchant accounts and its mobile one 50 customers but Sentuwa again sees rapid growth in 2014. A company called Multiplex runs street parking in Kampala and you can pay using Yo's mobile wallet which is integrated into its payment system. It was launched last November and there have been thousands of transactions.

Sentuwa's confidence about growth this year is partly based on the assumption that MTN will create a merchant framework similar to those operating in Kenya. Mobile money transactions in Uganda in 2013 were around US$6 billion but at present the vast majority of these transfers are person-to-person. The next wave of growth will be person to business (and vice-versa) payments:"We're targeting quadrupling growth this year on that basis."

Kenya which is slightly further ahead of the curve gives some indication of where things are going. Pesa Pesa has 10,000 merchant customers and it extends into pubs, shops, bars, restaurants and kiosks in the informal sector. It currently is handling US$1 million in transactions a month. Behaviours take time to change but the mobile phone is on its way to becoming Africa's debit card.

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